Minnesota Attorney General Punches National Arbitration Forum In The Face

The lawsuit alleges that NAF is a biased forum for resolving disputes, and claims that NAF has business ties to collection agencies that prejudice its arbitrators. A Business Week article last year uncovered materials showing that NAF marketed its arbitration services to companies as more likely to collect on debts than litigation.

The company tells consumers, the public, courts, and the government that it is independent and operates like an impartial court system. In fact, it has extensive ties to the collection industry-ties that it hides from the public,” said Attorney General Swanson.

The lawsuit alleges that the National Arbitration Forum, while holding itself out as impartial, works behind the scenes-alongside creditors and against the interests of ordinary consumers-to convince credit card companies and other creditors to insert arbitration provisions in their customer agreements and then appointing the Forum to decide the disputes. The lawsuit alleges that the Forum pays commissions to executives whose job it is to convince creditors to put mandatory arbitration clauses in their customer agreements. The suit alleges that the Forum does this to generate arbitration filings in the Forum-and hence, revenue-for itself.

San Francisco sued NAF last year, alleging similar biases and complaints.

Consumerist readers know how much we dislike forced arbitration, and we’re glad to see action being taken in courts, and in Congress, to curb its abuses.

@I Love New Jersey: what do you mean “which side”? The two sides are consumers (e.g., citizens) and then large companies that use arbitration to screw over consumers. Given that politicians should already “belong” to the voters, they should already be on anti-arbitration

(Yes, I recognize that some citizens, e.g., the ones directly profiting from it, are pro-arbitration, but no politician could possibly say with a straight face that their electorate would come out in favor of it)

@Megalomania: “Given that politicians should already “belong” to the voters, they should already be on anti-arbitration.”

Politicians belong to what or who ever can provide them with enough money to run again or a lobbying job after retiring. It has been a long cold time since a politician considered the pain of the voters when actually voting on legislation. Sure they will roll out the one example person who experienced a problem but that is as far as it will go… They say they will do much, but most often that “much” helps businesses and executives remove money from consumers…

These posts against MBA’s are great but they usually have more power if you add a face to those getting screwed. I though consumerist was going to have an ongoing expose feating those who MBA’s have devastated.

@Munchie: I believe it was just a one-week story-a-day feature. They still posts the stories (that are worth posting, I suppose) when they get them in their tip jar.If you’d like to see the stories that were posted, try the “Mandatory Binding Arbitration” tag. I haven’t looked, but my guess is they’d all be found there.

Actually, the Subcommittee on Domestic Policy to the House Oversight and Government Reform Committee is holding a hearing next week (7/22) on this very issue, entitled, “Arbitration or â€˜Arbitraryâ€™: The Misuse of Mandatory Arbitration to Collect Consumer Debts.â€ (Here’s a link:http://domesticpolicy.oversight.house.gov/story.asp?ID=2542)

Ideally, an arbitration should be a mini-court, where it’s cheaper to get justice. And if you get your butt kicked in arbitration, you ought to seriously consider not going to regular court (since you’ll get your butt kicked by a real judge/jury).

Now it’s a sham. Rather than continually getting all their judgements overturned in real court, they created this “Mandatory Binding Arbitration” to keep them from getting reversed when a real judge finds out how one-sided it is. If the judgements were realistic, it wouldn’t need to be “Mandatory”. The lawyers would likely suggest you give up or not take the case.

I was sued by a debt collectortrying to turn a NAF award into a judgement. They have since dropped the suit but I have somethng in store for them…

The NAF is a farce and with no discovery allowed, consumers are/were powerless against them. Even if you object to the arbitration and request documentation, they will ignore you and go ahead with the proceeding. Their rules and stipulations you had to follow were mind bending.

They actually kick out judges who don’t find in favor for the plaintiff which is usually the debt collector or credit card agency. Extremely biased against the consumer. I expect massive backlash against the ravenous debt collectors, crooked NAF goons and all lawyers involved. They knew it was a farce yet proceeded with this fraud. Meh…

It’s great that NAF is slowly folding in MN, but you guys have short memories! The AG’s office in Minnesota is terrible. Lori Swanson busted a union in her office, and fired a bunch of attorneys after they revealed unethical conduct in the office (like misuse of medicaid fraud funds, and how Lori would order attorneys to falsify affidavits and file frivolous claims just so that she could hold a press conference). All of the attorneys’ allegations were confirmed by the Minnesota Legislative Auditor. It’s great that NAF is out of the picture here, but I don’t think that the ends justify the means. Now that we know how Lori gets her results, I just can’t praise the office.

Unfortunately, this is an attorney general that has been slammed (and hard) for busting a union in her office. The Minnesota Legislative Auditor confirmed last year that she had ordered attorneys to falsify affidavits, file meritless lawsuits for good press, etc. She’s a bad apple, and while I’m no fan of NAF, I think it’s unfortunate that progressives are willing to turn a blind eye to the awful things that Lori Swanson has done in her office just because we dislike NAF. NAF is terrible, but Lori Swanson has shown that her tactics aren’t any better.

6-9-2004 NAF Awarded Wolpoff & Abramson/MBNA an Award against me. It was not until this past Tues 6-21-09 that it went to trial. I had copy of Federal Arbitration Act with me. It states that there is a one year limit to collect. There had been a complaint filed on 6-23-05. I did not respond to it. Time of Mother’s death. Still it was over the one year limit from Arbitration.
Judge Awarded the Arbitration Award. Overriding the Federal Arbitration Act with NC General Statue 1-569.22
I thought Federal was above State.
He would not let me approach bench to present evidence. Instead I had to give it to Opposing Attorney to read and present what he wanted to. I do not know what exactly to do now. I do feel I need to appeal and request a different judge. Any opinions? Help would be greatly appreciated.